Annualization

Annualization reform would allow contractors to provide, and employees to receive, benefits, without penalty

Overview

​Currently, the New York State
Department of Labor calculations annualize both private and public benefits by
the same method, resulting in excessive costs to contractors already providing
benefits to their workers. Because of these calculations, many contractors are
eliminating traditional benefit packages and, instead, are offering the
benefits as a cash supplement in the employee’s paycheck.

This growing practice
eliminates the double payment as previously offered benefits by contractors,
but exposes the employee to higher taxes and the employer to more payments in
payroll taxes and other burdens; all without the employee receiving important
benefits. Annualization reform would again allow contractors to provide, and
employees to receive, benefits, without penalty.

ABC SUPPORTS

S5695 and A2539 –This legislation would change the
manner in which workers’ supplemental benefits are calculated to use the
annualization methodology pursuant to the federal Davis-Bacon Act and provide
that any person debarred from federal contracts due to violations of the wage
requirements in the Act would similarly be debarred from being awarded New York
state and local contracts.

ABC OPPOSES

S3995/A5414 – This bill would
provide that any person debarred from federal contracts due to violations of
the wage requirements in the federal Davis-Bacon Act would similarly be
debarred from being awarded New York state and local contracts. The legislation
fails to recognize the inconsistency between federal Davis-Bacon Act work and
New York State public jobs. S5695 and A2539 addresses those concerns and
provides for a more fair approach to debarment reciprocity.

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